Time to update the tally: Each year, JPM has profits of about $25 billion dollars on revenues well over $100 billion dollars. Part of the cost of generating that revenue in a variety of dubious and even extra-legal ways are fines.

Since 2011, JPM has been fined $8B:

$56 million (April 2011)
$153.6 million (June 2011)
$229 Million (July 2011)
$88.3 Million (August 2011)
$5.29 Billion (February 2012)
$110 million (February 2012)
$150 million (March 2012)
$296.9 million (November 2012)
X% of $8.5 billion (January 2013)
$100 million (March 2013)
$410 million FERC settlement (August 2013)
$900 million (September 19, 2013)

Fortress Dimon: Its walls are made of lawyers, and its moat is made of burning money. Something is wrong with a board of directors that tolerates this sort of egregious incompetency and/or rampant illegality.

 

Sources: NYT, Bloomberg, Daily Beast

Category: Corporate Management, Legal, Regulation

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

42 Responses to “JP Morgan Fines Now More Than $8 Billion Dollars”

  1. Seaton says:

    Good points. I wonder how much the other top banks have had to pay in fines, similarly. Hmm, & next, what’s the fines-to-profits-ratio. Made $100B in profits, only $8B in fines, for example? (Not a clue have I) Sure seems like the “cost-of-doing-business” line-item is alive & well, and “fines” are merely puff-piece-PR statements, our governments having failed in the providing of justice for the vast citizenry. Merely “legal actions processing” at this point.

  2. Petey Wheatstraw says:

    Prince Prospero and his cronies play the pretenders in the walled-off Abbey, while we face grim reality in the filthy streets. Not to worry — they are infected. Their denial does not shield them from the phantom wearing the Mask of the Red Death. Soon, the Abbey will be empty.

  3. Herman Frank says:

    They must have VERY wealthy stockholders who “just take this”.

    In the lay-man’s simple opinion the fact that there were these fines, but not a single member of the board or executive ever saw the inside of a jail is tell-tale for the whole moral and legal quagmire we’ve dived into with the onset of the financial crisis. The stench of rotten law and justice is unbearable. (Or was it a case of “the best legislation money could buy”?)

    “and justice for all…”??? Don’t make me scream in frustration! 12 big-time convictions/settlements for a total of $ 8 BILLION?! And Jamie is still “King of the Hill”? And the Board is still around?

    SHAME!

  4. Moss says:

    Free money from the Fed coming in, dirty money made in the cesspool, fines paid in the end. As long as the fines paid are less then the cesspool money the business plan is profitable.

  5. capitalistic says:

    Technically, these fines are implicitly considered operating expenses. Relative to EBITDA, it would be hard to make a case for “avoiding” these egregious fines.

  6. Herman Frank says:

    So sorry for my lay-man’s “naivete”, thinking that anyone getting “a ticket for speeding” must have a sense of remorse about wasting money.

    It dawned on me! They don’t have any remorse or guilt or feeling of shame! WHY SHOULD THEY? BECAUSE THEY MADE $ 100+ BILLION IN THEIR RACKET!! The $ 8 billion is a small balance sheet item (spread out over THREE years, under “cost of doing business”! That’s less than $3 billion per year. In the last 2 days their $ 100 BILLION income has turned out more than the $ 8 bln in fines.

    From their side it is “who cares?”

    Put them in the slammer and take away their private property for the racketeers they are and you have finally gone to the heart of their business. The dons!

  7. NoKidding says:

    At what point does a thing stop being a penalty and start being a cost of doing business?

    What is the return?
    Is it illegal?
    What is the precedented penalty?
    Is there still a net return?
    OK, lets do it.

    • When you remove the penalty for criminal behavior, and make everything a shareholder funded fine.

      Hence, it IS a cost of doing business, nothing more.

      • rd says:

        I think the main reason they settle is because they get tired of their staff spending time in depositions and going through files for discovery. They prefer their staff to do more productive things, like find another market to front-run or spend time on hiding their risky assets.

        We live in a bizarre country where teenage kids getting caught with nickel bags of marijuana can spend years behind bars but nobody even gets prosecuted when fines of $8 billion for major financial and economic destruction get handed out.

      • rd says:

        BTW – the combination of Elizabeth Warren pressing the SEC and Mary Jo White responding to the press, means that they are now at least starting to get admissions that there were violations:

        http://www.marketwatch.com/story/jp-morgan-to-pay-920-million-whale-fine-2013-09-19

        We still have a long way to go before actual prosecutions of senior individuals occur, but it is a start. These types of admissions will also make it much easier for third-party victims to sue and get compensation as their main burden of proof would now be actual damages instead of causation. The civil lawsuits good have settlements much bigger than the fines.

  8. Willy2 says:

    Since 2009 JPM has been a bank covered by the FDIC. So, indirectly the taxpayer pays for all those fines as well.

    “Rogue Bank”, any one ??

    • NO, thats not right. FDIC is funded independently by bank fees (taxpayers only fund the FDIC in event its insurance fund gets exhausted).

      More accurate to say those fines are paid by shareholders

  9. A says:

    The primary question: like so many Wall Street players, why hasn’t anyone gone to jail ??

  10. Manofsteel11 says:

    Well said.
    Just imagine all the things competent regulators do not find and fine…The tip of the iceberg metaphor will not suffice…

  11. alexanderdelarge says:

    Aaaaarrrrrrgggghhhhh ! BR already plugged my ‘cost of doing business’, which is tolerated by the board and govt.
    BR, if you know, can you share, or opine as to why the govt ( sec, whomever ) almost always allows for a settlement ( ‘we mad them pay a fine ! ) and allows corp’s to get off with an ‘admit no wrong-doing’…?
    Why not skip the settlement $$ and no fault, and go right for convictions, if those are up for grabs ?
    AD

  12. Expat says:

    I don’t understand. Which part of the business plan has you perplexed? And why should the Board or the shareholders change a thing?

    JPM makes 25 billion a year, no one goes to jail, no crimes are committed, no wrongdoing is admitted, and everyone walks away with a very nice bonus, dividend or share price boost. The fines are tax deductible and Dimon is admired for his skills.

    This is our American Way of Life. What are you? A commie or something?

  13. budhak0n says:

    Prince Prospero and his cronies play the pretenders in the walled-off Abbey, while we face grim reality in the filthy streets. Not to worry — they are infected.

    Huh? The question I would ask is why would anyone tolerate that much abuse as a cost of doing business.

    Ah Modern America. Gotta love it. When did the world become so vehemently opposed to the guy who flips the bill?

    • Petey Wheatstraw says:

      Indeed. Maybe it’s because it’s easier, less prone to abuse, and more profitable than being a street-level crack dealer.

  14. budhak0n says:

    Oh that’s right I think that occurred PRECISELY at the time all you deadbeats figured that sound financial planning involved consultation with someone well versed in 7, 11 or 13. F off nazi punks

  15. GeorgeBurnsWasRight says:

    I’m not sure which is worse: That Dimon remains widely considered the best CEO of the major banks, or the fact that he may actually BE the best CEO of the major banks.

  16. Moe says:

    Where does all that money go? (the money they are fined)…back to the gubernment, but what is done with it?

    • SEC fines become part of SEC enforcement budget

      • rd says:

        Can they actually fund FBI investigators now? My understanding is that the FBI white collar crime group is just a tiny fraction fo what it was in the S&L crisis aftermath when thousands of people were prosecuted.

      • 873450 says:

        No. Sequester is having intended effect gutting FBI

        http://www.washingtonpost.com/blogs/federal-eye/wp/2013/09/18/fbi-hinting-at-10-day-shutdown-if-sequester-continues/

        FBI officials are hinting that the agency might furlough employees for more than 10 weekdays and shut down its offices on those dates if the government-wide spending cuts known as the sequester continue through the next fiscal year. Such a plan would affect FBI personnel more than the agency’s current sequester measures, which do not involve unpaid leave. It would also impact investigations and intelligence gathering, as only essential employees would remain on the job during furlough days. The first dates for unpaid leave would likely occur around Thanksgiving and Christmas, taking place on days that workers typically use vacation time, according to an official who spoke anonymously to discuss plans that are still fluid.

  17. DeDude says:

    Something is wrong with a society that doesn’t close down a racket like that. It’s like the mob, you don’t try to reform it you close it down and throw the criminals in jail.

  18. wally says:

    The thing about being a sociopath is that you don’t give a damn; it’s all just business.

  19. Concerned Neighbour says:

    No wonder John McCain felt he could lecture the Russians:

    - rampant white-collar “financial terrorism” is business as usual (Holder: it’s too difficult to prosecute these people, and we don’t want to create any financial instability).
    - “temporary” (read: permanent) stimulus overwhelmingly benefits the same people that are most responsible for the crisis, while those that need the stimulus get scraps.
    - financial “markets” that are only allowed to go in one direction by organs of the state
    - secret 1984-style eavesdropping by the state.

    The crony capitalists are firmly in control of most democratic institutions (government, politicians, “free” media, financial “markets”). Christ, they’ve even got half the country arguing against their own interests! The country is seriously f*cked.

    • budhak0n says:

      McCain ( or at least his office ) is losing his marbles. They just sent my nine year old son a solicitation for contributions to help fund some ” ” hmmm how do I come up with the words to describe this…

      Basically it seems like it’s a PAC of some odd sort that wants to perpetuate in DC funding for people who basically are still spouting the same exact nonsense that went on in 1985 in DC. Talk about being out of touch with the times. Well if people get it in their mailbox and mail in money… all the power to them. Just struck me as funny and odd that a nine year old kid is popping up on their marketing lists.

      C’est la vie. By the way, it’s ALL just business. All that changes is whether it’s business as usual or the utter kind.

  20. Low Budget Dave says:

    This is the lesson being taught in business schools all across America. If you steal $25 thousand, you (might) go to jail for a long time. If you steal $25 billion, you (might) have to pay a 30% fine.

    If someone graduates from such a school, and proceeds to do anything besides theft, they are either extraordinarily honest, or dim-witted.

  21. mpappa says:

    $8 billion to the Government and what are they doing with the money? $8 billion in low interest loans to qualified borrowers would do more to stimulate the economy. When you are as big as JP Morgan, it’s too big to comply.

  22. nofoulsontheplayground says:

    It’s almost like JPM is running a business model similar to the Mexican Sinaloa cartel. It’s as if JPM expects to lose as much as 10% of their profits via US government interdiction, and they’re OK with that as long as it’s business as usual.

  23. tippet523 says:

    It would be interesting to see if fines were 300 million plus 5% of managements holdings and options if the company would stop getting fined

  24. 873450 says:

    Stop lecturing us already and just say how much our shareholders and customers will pay to put this mistake behind us without admitting any wrongdoing, then GTFO of our way so we can get back to innovate the same gimmicky bet with a different twist that isn’t detected so easy by all you losers stuck absorbing our risk and paying our losses for not getting invited to our side of the windfall.

  25. formerlawyer says:

    The lesson is clear, the vampire squid and JPM own the world – we little people just live in it.
    http://www.forbes.com/sites/jakezamansky/2013/08/08/the-great-vampire-squid-keeps-on-sucking/

  26. GeorgeBurnsWasRight says:

    S&P Capital (whoever they are) just upgraded JPM from $55 to $61 specifically because of this latest settlement. Sigh.

  27. pc says:

    The government should do an AA on JPM and by AA I mean Arthur Andersen…

  28. [...] have been tracking JPM’s fines, but if you want an industry overview, try this collection: Here is a [...]

  29. [...] CONGRATULATIONS, JP MORGAN CHASE!: I’d like to take a moment to congratulate JP Morgan Chase for having been fined $8 billion in little more than two years! As per Barry Ritholtz, here’s the breakdown: [...]